Gold is heading for a seventh weekly gain
Most commodities rose on the last trading day of the week on Friday, even as oil was headed for a steep weekly loss.
Gold prices were hovering near their record highs on Friday as the yellow metal was set for its seventh consecutive weekly gain.
Copper prices also rose more than 1% on Friday due to reports about production outages.
Silver prices had briefly breached the $48 per ounce mark on COMEX on Thursday before profit taking dragged the metal back to $47.
Gold shines
Following the start of the US government shutdown on Thursday, gold prices have continued their ascent, reaching an unprecedented high.
“Gold is in demand as a safe haven, partly because the shutdown in the US has added another factor of uncertainty,” Barbara Lambrecht, commodity analyst at Commerzbank AG, said in a report.
“Even if the extent of the price increase gives cause for skepticism, there is no end in sight to the upward trend.
Various public and private data sources suggest that the US job market experienced stagnation in September. Hiring remained sluggish, and unemployment rates showed no change.
According to CME Group’s FedWatch tool, investors anticipate a 97% chance of a 25-basis-point rate cut in October, with an 88% probability of a similar reduction in December.
“Although, as has been noted repeatedly over the past month or so, the daily MACD continues to indicate that the market is overbought,” said David Morrison, senior market analyst at Trade Nation.
At the time of writing, the December gold contract on COMEX was at $3,910.87 per ounce, up more than 1%.
Gold now
What’s happening:-
Gold prices rose to record highs on Monday with growing safe-haven demand.
What happened:-
Expectations of further interest rate cuts by the Federal Reserve and concerns around the US dollar supported gold.
Festive demand from India, stock market volatility and fears of a potential government shutdown in the US provided a further boost to gold prices.
Why it matters:-
Gold has surged more than 43% year to date mainly due to geopolitical concerns. Tariff announcements and war have supported the yellow metal.
Earlier this month, the US Federal Reserve cut its benchmark interest rates for the first time since December 2024. Policymakers signalling more rate cuts ahead triggered more gold buying. This is because a low-rate environment reduces the opportunity cost of holding the non-yielding yellow metal.
The personal consumption expenditures index report released on Friday showed inflation coming in-line with expectations, raising prospects of rate cuts by the Fed at its upcoming policy meetings this year.
Weakness in the US dollar lent further support to gold prices, as a softer greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.2% on Monday.
Investors are closely monitoring the risk of a government shutdown in the US, which could delay major data releases, including the much-awaited NFP (nonfarm payrolls) report.
With the Indian festive season of Diwali approaching, consumer demand in the global market has risen sharply.
In other metals trading, silver prices rose to $47.016 per ounce and platinum climbed to $1,632.3. Palladium bucked the trend and settled lower at $1,291.00.
Gold today
What to watch:-
Investors will keep an eye on negotiations related to the US government slowdown. The release of the NFP report, due this Friday, will also remain in focus. The US economy, which added 22,000 jobs in August, is expected to add 50,000 jobs in September